Stocks Soar Most Since 2011 Fed Rescue As Bernanke's Masterplan Is Unveiled

Stocks shrugged off Carney's disappointment and focused on what Bernanke, Mester, Kuroda, and Abe had to say...

 

The S&P 500 is as overbought as at any local high in the last year...

 

Notably the last two days have seen the same opening squeeze of shorts as before but unlike before, "Most Shorted" stocks have faded weaker for the rest of the day...

 

Small Caps underperformed...

 

And Small Caps are lagging post-Brexit while Trannies are soaring...

 

The last 12 days 8-plus percent surge in the S&P is the greatest since Oct 2011 - the last time Bernanke saved the world with FX Swap Lines...

This time he was at it again with a new masterplan...

Bernanke, who met Japanese leaders in Tokyo this week, had floated the idea of perpetual bonds during earlier discussions in Washington with one of Prime Minister Shinzo Abe’s key advisers. Abe advisor Etsuro Honda said that during an hour-long discussion with Bernanke in April the former Federal Reserve chief warned there was a risk Japan at any time could return to deflation. He noted that helicopter money could work as the strongest tool to overcome deflation, according to Honda. Bernanke noted it was an option. The implication, as we said last week when we previewed just this "big thing" is that Japan is indeed set to be the first testing ground of helicopter money in the modern financial system.

JPMorgan sparked some exuberance in financials... which finally snapped the sector green post-Brexit... this is the 7th straight Up-Day for financials - longest streak in 15 months...

 

But the decoupling is becoming farcical again...

 

 

VIX briefly flash-crashed this morning as Carney disappointed - dropping to 12.14 - the lowest since 8/5/15!! (VIX is down 11 of the last 13 days)

 

 

High yields bonds recovered all of the Icahn "Danger Ahead" losses (but not seem to have found resistance at this key level...

 

As HY Energy credit has decoupled notably from Oil prices...

 

But then again so have Energy stocks...

 

Treasury yields rose notably across the entire complex with the long-end underperforming...

 

With desk chatter of considerable 30Y selling which sparked the biggest 2s30s steepening since Dec 2nd 2015...

 

The USD Index limped lower today as GBP strength (Carney didn't cut) and JPY weakness (more buffoonery) offset each other...

 

 

Commodities had a quiet day with PMs slightly lower and copper and crude marginally higher..

 

Notably this is the 11th day of Up-Down-Up trading in WTI Crude as oil has remained trapped for 6 days between its 100- and 200-day moving average...this also happened last July!!

 

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The S&P 500 is now 200 points 'rich' to the Fed Balance Sheet - its richest ever...

 

And finally there's this... the sixth quarterly decline in earnings as we soar to record high stock prices...

 

Charts: Bloomberg